Accepting credit cards, debit cards, and digital wallets comes with merchant processing fees. In 2026, those fees are more than a cost of doing business—they are a lever for profitability and customer satisfaction. With new regulations, evolving payment technology, and tighter margins across many sectors, understanding how fees work and how to control them can materially impact your bottom line. 

This guide breaks down the components of merchant processing fees, highlights key trends, and offers practical steps to reduce costs while keeping checkout experiences fast and secure. Throughout, we’ll also compare credit card processing fees, credit card merchant fees, and credit card processing rates so you can benchmark how your business is doing in comparison.

Why merchant processing fees matter more than ever

Merchant processing fees have always affected profits, but in 2026, they matter more than ever. Businesses are facing higher operating costs and slower revenue growth, so every small saving counts. Payment networks are adjusting credit card processing rates, and processors are introducing more complex pricing structures. If you haven’t reviewed your payment setup and fee schedule recently, now is the time.

Several factors are driving costs up: higher interchange fees in some categories, increased spending on fraud prevention, and new compliance requirements. For small businesses, even a 0.20% change in your effective rate can mean thousands of dollars a year. For high-volume companies, the impact can reach six or seven figures in credit card processing fees and related expenses.

These fees affect your profit on every sale and often go unnoticed unless tracked. If your margins are tight, your processing rate can determine whether discounts and promotions help your bottom line or hurt it. Businesses that monitor credit card merchant fees and compare them to their own credit card processing rates are better equipped to make smart pricing decisions.

Your payment setup also impacts customer experience. Lower decline rates, faster checkouts, and support for preferred payment methods reduce friction and boost conversions. Optimizing routing, authentication, and tokenization can cut costs and increase revenue by reducing false declines, enabling popular wallets, and using network tokenization—all of which influence both merchant processing fees and approval rates.

What are merchant processing fees?

Merchant processing fees are the total costs a business pays to accept card and digital payments. These charges cover card network fees, compensation to issuing banks for risk and handling, and service costs from your processor or gateway. While people often refer to credit card processing fees, credit card merchant fees, and credit card processing rates interchangeably, it helps to distinguish the components and how they show up on your statements.

The most common components include:

• Interchange fees paid to the cardholder’s issuing bank
• Assessment and network fees charged by card brands (Visa, Mastercard, etc.)
• Processor markup for services such as gateway access, PCI compliance tools, fraud screening, customer support, and settlement
• Ancillary charges like chargeback fees, monthly account fees, and PCI non-compliance penalties

Fees are typically a mix of percentage and per-transaction amounts. Interchange varies by card type, entry method, and transaction category. Assessments are set by networks and often expressed as small percentages or fixed cents per transaction. Processor markup is the negotiable portion and can be priced as interchange-plus, flat-rate, or tiered. Knowing how credit card merchant fees and credit card processing rates work together helps you predict your cost per sale.

In simple terms, your total cost for a transaction equals interchange + assessments + processor markup. For example, a $100 in-person sale might include:

• Interchange: 1.65% + $0.10
• Assessments: 0.13%
• Processor markup: 0.25% + $0.05

That adds up to $2.18 in fees—an effective rate of 2.18%. Tracking these merchant processing fees across different types of transactions shows where you can make the biggest improvements.

Key trends in credit card processing for 2026

Credit card processing is evolving quickly in 2026, and these changes are reshaping how businesses manage costs and customer payments. Business owners who understand these trends can make smarter decisions about merchant processing fees, credit card processing rates, and the payment methods they offer. Let’s look at the key developments shaping credit card processing this year.

1. Regulation and compliance are here to stay

In 2026, compliance isn’t optional—it’s a cost driver. Stronger customer authentication, tighter fraud liability rules, and stricter dispute documentation are becoming the norm. PCI DSS 4.0 deadlines are pushing merchants to upgrade security controls, update policies, and improve network segmentation. Investing early in compliance can help you avoid penalties and reduce risk-related fees tied to credit card processing.

2. Technology advancements are changing fee dynamics

Network tokenization and improved address verification reduce fraud and chargebacks, lowering the total cost of acceptance. Contactless adoption remains strong, and card-present contactless often qualifies for lower interchange than keyed or card-not-present transactions. Account updater services that refresh stored credentials improve authorization rates and can reduce fees wasted on declines, directly influencing credit card processing rates and credit card merchant fees.

3. Alternative payment methods are expanding

Digital wallets like Apple Pay and Google Pay typically route through card networks but can boost approval rates and reduce fraud, improving your effective costs. Buy Now, Pay Later (BNPL) introduces higher fees than standard card rates, but it can increase conversions and average order value—so weigh the extra revenue against the added cost.

Meanwhile, ACH and bank-to-bank payments are gaining traction for recurring billing and invoicing. These options often cost less than cards and can help offset merchant processing fees for higher-risk transactions.

How to calculate your merchant processing fees

Start by quantifying your total fees relative to total sales to determine your effective rate. Then evaluate how each fee component contributes to the overall cost.

• Gather one to three months of processing statements with line-item details
• Identify total fees including interchange, assessments, processor markup, monthly charges, and incidentals
• Compute your effective rate: total fees divided by total processed volume
• Calculate average fee per transaction: total fees divided by total transaction count
• Segment transactions by card-present vs. card-not-present, debit vs. credit, rewards vs. corporate, and keyed vs. dipped/tapped
• Review authorization and decline rates to uncover hidden costs from failed transactions
• Map chargebacks and refunds to categories with higher risk and cost

Helpful tools include processor portals with exportable data, statements that show interchange categories, spreadsheets or finance software for effective rate calculations, and analytics dashboards for approval, fraud, and fee breakdowns. If your provider’s reporting is limited, request more granular data so you can assess credit card processing fees and credit card merchant fees by channel.

Avoid these common pitfalls:

• Focusing on headline rates instead of all-in effective rate
• Overlooking monthly or annual fees, compliance charges, and chargeback costs
• Misclassifying card-not-present transactions that should qualify for card-present rates
• Accepting tiered pricing without transparency into interchange categories
• Neglecting authorization rate improvements, which inflate cost per successful sale

4 effective ways to reduce merchant processing fees

There are proven strategies to cut fees without sacrificing customer experience or security. Focus on pricing, qualification, and payment mix.

1. Negotiate with data

Prepare your volume, average ticket, card mix, and risk profile. Ask for interchange-plus pricing with transparent markup, volume-based discounts, and waived or reduced monthly and PCI fees. Benchmark proposals across at least two providers and request rate reviews every 6–12 months, especially after growth or mix changes. Use your current credit card processing rates and credit card merchant fees as a baseline to demonstrate performance improvements.

2. Evaluate different pricing models

Flat-rate pricing can work for very small volumes or highly variable mixes, but it often costs more for established merchants. If you use a flat rate, make sure it covers typical scenarios without penalizing low-risk, card-present transactions. Always compare your flat rate against your effective rate to confirm savings and ensure the structure aligns with your merchant processing fees and target credit card processing rates.

For businesses looking to eliminate processing costs altogether, zero-fee programs like Sekure’s Edge offer an alternative. These programs allow merchants to pass processing fees to customers transparently, reducing or even eliminating the expense for the business. While this approach isn’t right for every model, it can significantly improve margins for merchants who prioritize cost control.

3. Optimize transaction qualification

• Use EMV and contactless for card-present sales to avoid downgrades
• Enable address verification service (AVS) for card-not-present transactions
• Capture complete data fields such as postal code and CVV
• Use network tokenization for stored cards to improve approvals and reduce fraud
• Apply fraud tools with tunable rules to cut chargebacks without excessive false positives
• Batch settle promptly—ideally the same day—to avoid downgrade penalties
• Maintain PCI compliance to prevent non-compliance fees

4. Steer to lower-cost rails

For recurring billing, offer ACH or bank transfer incentives. For high-ticket B2B transactions, capture Level II and Level III data to qualify for lower interchange on corporate and purchasing cards. These steps can materially reduce credit card processing fees and stabilize credit card processing rates across your payment mix.

Choosing the right payment partner for your business

The right merchant services provider or payment processor can help you reduce costs and improve checkout performance. When choosing a payment partner, prioritize capabilities that directly influence fees and approvals without sacrificing service. Here are a few questions to keep in mind during your search:

Do they support these features?

• Interchange-plus pricing with transparent markup
• Granular reporting with line-item fee and interchange detail
• Tokenization and account updater services
• Robust, configurable fraud tools and machine learning models
• Support for EMV, contactless, and tap-to-pay
• Easy wallet integrations (Apple Pay, Google Pay)
• Recurring billing, invoicing, and subscription management
• Level II/III support for B2B transactions
• Streamlined PCI compliance resources and guidance

Do they provide multiple pricing structures?

When evaluating a payment processor, check if they offer multiple pricing structures. Interchange-plus usually provides the most transparency and fairness, especially for businesses with a mix of transaction types. Tiered pricing can hide true costs and often leads to expensive downgrades. Flat-rate pricing is simple but not always the cheapest option for established merchants.

Some providers also offer zero-fee programs, like Sekure’s Edge, which allow merchants to pass processing costs to customers—eliminating fees for the business. This can significantly improve margins, though it’s important to consider customer experience and compliance requirements.

Finally, ask about custom pricing options. For high-volume or specialized businesses, processors may design tailored structures that align with your transaction profile and help you achieve the lowest effective rate. 

Do they provide good customer support?

Responsive support reduces downtime, dispute losses, and compliance gaps. Look for support availability, dedicated account management, proactive rate reviews, and clear dispute handling workflows. Strong onboarding and technical documentation help you implement best practices that lower fees from day one and maintain competitive credit card processing rates.

Stop overpaying on processing fees

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Plus, our Rate Sekurity Guarantee® means your setup is continuously monitored by Payment Experts to keep you on the best deal.

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Typical merchant processing fees breakdown

Understanding how fees stack up for common scenarios makes it easier to identify savings. The ranges vary by industry, risk, and transaction method, but these examples show how components contribute to the effective rate.

Scenario	Interchange	Assessments	Processor Markup	Estimated Effective Rate
Card-present retail, EMV/contactless	1.50% + $0.10	0.12%	0.20% + $0.05	~1.97%–2.25%
eCommerce, card-not-present	1.80% + $0.10	0.13%	0.35% + $0.05	~2.30%–3.00%
Recurring billing with tokenization	Varies by card (often similar to CNP)	0.12%–0.13%	0.25% + $0.05	Depends on approval rate and declines
B2B with Level II/III data	Reduced vs. standard corporate	0.12%–0.13%	0.20% + $0.05	Often materially lower than standard B2B
ACH for subscriptions/invoices	N/A	N/A	Flat fee (often $0.25–$1.50)	Generally lower than card for mid/high tickets

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Scenario

Interchange

Assessments

Processor Markup

Estimated Effective Rate

Card-present retail, EMV/contactless

1.50% + $0.10

0.12%

0.20% + $0.05

~1.97%–2.25%

eCommerce, card-not-present

1.80% + $0.10

0.13%

0.35% + $0.05

~2.30%–3.00%

Recurring billing with tokenization

Varies by card (often similar to CNP)

0.12%–0.13%

0.25% + $0.05

Depends on approval rate and declines

B2B with Level II/III data

Reduced vs. standard corporate

0.12%–0.13%

0.20% + $0.05

Often materially lower than standard B2B

ACH for subscriptions/invoices

N/A

N/A

Flat fee (often $0.25–$1.50)

Generally lower than card for mid/high tickets

Use your own statement data to refine these estimates and benchmark against peers in your category. Tracking merchant processing fees alongside credit card processing fees helps isolate where optimization efforts will pay off fastest.

Operational best practices that lower fees

Small process improvements often yield outsized savings by reducing downgrades and boosting authorizations.

• Keep terminals updated and enable contactless wherever practical
• Ensure full data capture for eCommerce (AVS, CVV, postal code)
• Use tokenization for stored credentials and enable account updater
• Configure fraud rules to balance risk reduction and approval rates
• Settle batches daily and avoid delayed settlement that triggers downgrades
• Monitor approval rates by issuer, card type, and channel to pinpoint issues
• Maintain PCI DSS 4.0 compliance and document controls to avoid penalties
• Train staff on proper entry methods to prevent keyed transactions when chip/tap is available

These practices improve authorization rates, lower chargebacks, and help stabilize credit card processing rates—leading to reduced credit card merchant fees over time.

Frequently asked questions

What is a good effective rate for merchant processing fees?

It depends on your business model and transaction mix. For card-present retail with strong EMV usage, many merchants target roughly 1.8% to 2.3%. For eCommerce with higher fraud risk, a typical range may be 2.2% to 3.0% or more. Benchmark against your category average and track your trend over time. Always compare your credit card processing rates across channels to spot outliers.

Can merchants pass credit card fees to customers? 

Yes, merchants can pass credit card fees to customers, but the method matters. Surcharging—adding a fee to credit card transactions—is legal in most U.S. states under strict rules: you must follow card brand policies, cap surcharges at 3% or actual cost, disclose fees clearly, and never apply them to debit or prepaid cards. Some states prohibit surcharging entirely, so always check local laws and network requirements before implementing.

An alternative is dual pricing, also known as cash discounting. Instead of adding a fee, you display two prices: a lower price for cash or debit and a higher price for credit cards. Dual pricing is legal nationwide, even where surcharging is banned, as long as both prices are clearly shown and receipts reflect the correct amount.

For merchants who want a simple, compliant solution, Sekure’s Edge program offers automated dual pricing. It eliminates processing costs for the business by passing them to card-paying customers transparently, while providing signage and POS integration to keep you compliant. This approach helps protect margins without risking legal or customer experience issues.

Are debit cards cheaper than credit cards? 

Often yes, especially for regulated debit, which typically has lower interchange. Encouraging contactless debit or PIN debit can reduce costs, but customer preferences and acceptance policies should guide your approach.

Do digital wallets increase fees? 

Wallet transactions usually route over the same card networks and carry similar interchange. However, they can improve authorization rates and reduce fraud, effectively lowering your cost per successful sale. Net impact depends on your mix and implementation quality, but many merchants see improved effective rates and lower credit card processing fees when wallets are implemented correctly.

What causes chargebacks to increase fees? 

Chargebacks add direct fees and indirect costs through lost revenue, time, and potential higher risk pricing. Better verification, compelling evidence, and clear customer communication reduce disputes and overall fee burden. Proactive dispute management can stabilize credit card processing rates and prevent future pricing adjustments.

How often should I review my processing fees? 

Aim for a light check every quarter and a deeper renegotiation once a year. Do an immediate review any time your business changes—think spikes or dips in volume, a new product mix, adding subscriptions, shifting more sales online, or when card brands update rules and credit card processing rates. Those moments can move your merchant processing fees and credit card merchant fees more than you’d expect.

If you’re with Sekure, the Rate Sekurity Guarantee^® makes this easier. Your setup is continuously monitored by Payment Experts who watch for pricing drifts, hidden markups, and better offers—then proactively tune your configuration so you’re still getting the best deal. In short: quarterly analytics to spot trends, annual renegotiation to lock in savings, and ongoing expert oversight to keep your effective rate tight.

Action plan: Lower your effective rate in 90 days

• Week 1–2: Collect three months of statements, calculate your effective rate, and segment fees by channel and card type
• Week 3–4: Identify downgrade causes (late settlement, missing data), fix terminal configurations, and enable AVS and CVV
• Week 5–6: Implement tokenization and account updater for stored cards, tune fraud settings, and set daily batch settlement
• Week 7–8: Solicit interchange-plus quotes from a few providers and compare their offers
• Week 9–10: Pilot ACH or bank transfer for recurring billing, and capture Level II/III data for applicable B2B transactions
• Week 11–12: Negotiate pricing based on improved metrics, finalize provider selection or re-up with better terms, and schedule yearly reviews

By combining smarter card qualification, better approval rates, and negotiating pricing, many merchants can lower their effective rate without hurting the customer experience. As you roll out these changes, keep an eye on your merchant processing fees, credit card processing fees, and overall credit card processing rates to make sure every tweak delivers real savings.If you’re working with Sekure, the Rate Sekurity Guarantee^® takes this a step further. Your account is continuously monitored by Payment Experts who check for hidden markups, pricing shifts, and better opportunities—so you’re always getting the best deal without having to chase it yourself.